From time-to-time, international standard setting and oversight bodies, conduct assessment of the DFSA’s regulatory regime. Our aim is to create an environment that is on par with international standards of regulation and represents a best-of-breed of best practices.
IMF and World Bank FSAP
The International Monetary Fund and World Bank (IMF) jointly conduct periodic Financial System Stability Assessments (FSAP) of member states, typically on a three to five year cycle. The purpose of the Assessments is to ensure that a jurisdiction's regulatory and supervisory systems and practices contribute to financial stability. In that regard, the IMF assesses financial regulators' quality and performance, and conformity with recognised international best practice.
There are three oversight bodies that prescribe minimum standards for the Banking, Insurance, and Securities sectors: the Basel Committee on Banking Supervision (BCBS), the International Association of Insurance Supervisors (IAIS), and the International Organisation of Securities Commissions (IOSCO).
The IMF completed an FSAP of the United Arab Emirates on July 27, 2007, with a public report, issued on October 31, 2007. The UAE FSAP included a separate assessment of the DIFC, a separate jurisdiction within the UAE, and the DFSA. The IMF considers the DIFC to be an on-shore jurisdiction.
The FSAP Report states, in pertinent part, that "...the legal framework governing commercial activity in the Centre is well developed, with highly-skilled supervisors and a strong monitoring system in place." Further, the DIFC "...has well defined regulatory and supervisory systems that are on a par with other regional financial centers (such as Singapore and Hong Kong)."
The FSAP included a separate "Detailed Assessment of Observance of IOSCO Objectives and Principles of Securities Regulation". The IMF concluded that "The DFSA has established a very impressive set of laws, regulations and rules and policies and procedures for regulation. Its staff is well qualified and work to international best practice standards."
The assessment considered 29 of the 30 IOSCO Principles (one Principle pertaining to payment systems was not applicable), and concluded that the DFSA had "Fully Implemented" 27 Principles and has "Broadly Implemented" the remaining two Principles.
The FSAP did not include a detailed review of the DFSA's implementation of the BCBS Core Principles for Effective Banking Supervision or the IAIS Core Principles due to the developing nature of those business sectors in the DIFC at the time of the on-site assessment (early 2007). Accordingly, and in line with international best practice and transparency, we have performed self assessments of adherence to those standards. The self assessments, below, reflect that the DFSA substantially meets these international standards.
Self Assessment on Basel Core Principles
Self Assessment on the IAIS Core Principles
IMF FATF Report
United Arab Emirates: Detailed Assessment Report on Anti-Money Laundering and Combating the Financing of Terrorism - September 2008